Deep dive: What can the recent roller coaster of UK aid tell us about the future?

Instead of our regular Newswire last week, we brought you deep dives into some of this year’s key development topics. Today is our last deep dive — and we're digging into the ups and downs of U.K. aid.

A roller coaster takes its riders through breathtaking bends, sudden switchbacks, and terrifying twists. That’s exactly like following the 14 years of U.K. development policy under the previous Conservative government.

Labour’s success in July’s election has brought down the curtain on a white-knuckle period when the U.K. was first the world’s cheerleader for aid, then its bad-mouthing opponent — then, to some degree, a principled supporter again.

Its aid budget soared even as spending on domestic public services crashed, perhaps sowing the seeds for the later devastating cuts that even ministers admitted were responsible for the deaths of tens of thousands of people.

Most strikingly, in 2010, Conservative leaders believed higher aid spending was a vote winner. Yet, by the decade’s end, they were convinced that slashing the budget was the popular move. Now, depressingly, the issue barely features in political debate.

“The past is a foreign country; they do things differently there,” is the immortal opening line from L.P. Hartley’s novel "The Go-Between.” It also accurately describes the gulf between the heady days of 2010 and the Conservatives’ hardline 2024 manifesto — which argued for “every penny” of a shrunken aid budget to be spent in the “strict national interest.”

So cast your minds back 14 years, to when the youthful new Prime Minister David Cameron entered Downing Street with a commitment to meet the United Nations target of spending 0.7% of gross national income on aid by 2013.

Incredible as it now seems, Cameron saw it as a way to “detoxify” the Tories, who had been tagged “the nasty party” by one of their own — and to outflank a Labour government that had made the 0.7% pledge but failed to achieve it during 13 years in office.

And this commitment was met — in stunning fashion — through a 60%-plus boost to the budget of the Department for International Development, or DFID, even as austerity Britain slashed welfare spending and shuttered its libraries, leisure centers, and museums.

Cameron basked, deservedly, in the world’s praise as an international development leader, going on to help shape the U.N.’s Sustainable Development Goals, which were agreed upon two years later.

The tide turns

But, looking back, the tide had already turned in Tory Britain. The cries from right-wing voices that aid was a luxury the U.K. could not afford were getting louder and, even before Cameron’s exit in 2016, the party was regretting its pro-aid stance.

The new prime minister, Theresa May, was disinterested and picked an international development secretary, Priti Patel, who embraced the role as part of a new agenda outside the European Union, a way to secure “free trade agreements but also life post-Brexit.”

It paved the way for Boris Johnson’s notorious attack on the aid budget as “some giant cashpoint in the sky,” and the 2020 decisions to submerge DFID within a giant Foreign, Commonwealth & Development Office — with a devastating loss of expertise — and then cut spending to 0.5% of national income, taking around £4 billion out of the £15 billion budget overnight.

Government WhatsApp messages later revealed the decision to ax DFID was rammed through to distract attention from Johnson’s even more shambolic handling of the COVID-19 pandemic.

In the chaos, ambassadors were given just weeks to decide how to implement bilateral aid cuts of at least 50% in the world’s lowest-income countries, inflicting enormous damage not just on those programs but on Britain’s global reputation.

By 2022, then-foreign secretary Liz Truss appeared to have ditched altogether the legal commitment to direct aid to fighting poverty, boasting it would be a weapon to exert U.K. influence abroad, “a key part of our foreign policy.”

Over the years, the aid pot had been sliced and diced, with chunks handed to departments other than DFID. Now, a staggering one-third of a budget meant for overseas programs was being spent on housing and feeding asylum-seekers in the U.K. — with even top civil servants unable to understand the anger provoked.

In a huge irony, Rwanda became the location for deporting asylum-seekers — having been, in the Cameron years, the place leading Conservative politicians and volunteers went to deliver aid projects that the party itself set up and funded.

Background reading:

• UK development strategy to put 'economic power at the centre.'

• What Johnson's speech reveals about the future of UK aid. (Pro)

• Over 200 ex-DFID staffers have left UK's FCDO since merger.

‘A little bit more business DNA’

However, long before the death of DFID and 0.7%, less news-grabby yet key changes were made to rein in DFID’s freedom, to reduce the influence of NGOs, and, as future international development secretary Andrew Mitchell put it even before the 2010 election, “to inject a little bit more business DNA.”

By 2015, this suspicion about traditional aid delivery had become a determination to channel many more billions through the government’s private equity arm — despite allegations of managerial greed and poor investments, often made through companies established in tax havens.

When the decade dawned, the CDC Group was a relatively small player, but now — reborn as British International Investment, or BII, in 2022 — it enjoys an exalted status, its funding shielded through the cuts and now employing more than 600 people across Africa and Asia.

The return to poverty-fighting

Mitchell, after his shock 2022 return to the development brief, resisted calls from members of Parliament to exert greater government control over BII and instead asked it to spearhead his new private sector-led strategy to restore order to U.K. aid after years of neglect.

That 2023 blueprint was the final loop-the-loop on this roller coaster — a renouncing of the Johnson and Truss doctrine of self-interest and a return to making “ending extreme poverty” the goal.

With no prospect of a return to 0.7%, Mitchell turned to the financial muscle of insurance firms and pension funds in the City of London to “mobilize the money” needed, arguing success would anyway dwarf the size of government development budgets.

Aid organizations and think tanks adored its return to an aim of fighting poverty — but were deeply skeptical about the resources behind it, noting that more than 250 promises of “we will” in the document suggested a dreamy wish list, with no real focus.

With Labour already poised to take power, Mitchell sought to secure the strategy’s survival in a post-Conservative Britain by asking his political opponents to contribute to it — an unprecedented step in a country with such tribal politics.

Catch up on all our recent coverage of Labour's return:

• How David Lammy could bring real change to UK aid. (Pro)

• Labour is likely to win the UK election. What would that mean for aid? (Pro)

• Labour rules out aid department or early return to 0.7%. (Pro)

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End of the roller coaster?

Will Labour adopt Mitchell’s strategy and allow Conservative development policy to live on past the party’s 14 years in power? Very possibly, given the party’s own lack of fresh thinking and apparent downgrading of aid in the policy pecking order — in stark contrast to when it last took power in 1997 and created DFID.

This could be as significant a legacy of the Tory years as the seemingly permanent aid cuts and the lost department — issues that caused huge waves over the last decade — made scarcely a ripple during the election campaign or since.

Labour appears to have accepted the settlement of a vastly reduced budget, a reliance on private finance to do the heavy lifting, and a belief in the benefits of diplomacy and development tied at the hip — with little opposition, so far at least, from its own members of Parliament or the U.K.’s aid sector.

After 14 years of hair-raising twists and turns, Keir Starmer’s party may have replaced the Conservative roller coaster with a gentle carousel.

Read: Mitchell fears UK development will 'fall silent' under Labour

Learn more: The UK aid sector's key asks from the next government (Pro)

+ Catch up on the latest news and analysis of U.K. aid.

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